Mr Tytler has been a central Minister and is a member of the Congress Working Committee, a panel of top decision makers of the ruling party. Congress' Digvijaya Singh defended Mr Tytler saying "He has not been convicted yet. Why should he step down?"
The court today rejected the Central Bureau of Investigation's (CBI) closure report that gave a clean chit to Mr Tytler in 2009 and has ordered it to investigate his role all over again, this time examining three witnesses who it had not questioned earlier. These witnesses had moved to the US after the riots, in which 3,000 Sikhs were killed in Delhi alone.
Lakhwinder Kaur, the widow of one of the three Sikh men killed by the mob, had moved court demanding that these witnesses be questioned. She was 16 and pregnant when her husband was murdered. She is 45 now.
The CBI has already investigated the case twice before and claims it has found no evidence to suggest that Mr Tytler was present when the mob murdered the men near a north Delhi Gurudwara on November 1, 1984, a day after Mrs Gandhi was assassinated. It says at that time, Mr Tytler was at Teen Murti Bhawan, Indira Gandhi's residence.
A witness, Jasbir Singh, has alleged before court and the Justice Nanavati Commission which investigated the riots too, that Mr Tytler ordered the mob to kill Sikhs and quoted the former MP as saying that his position among Congress leaders was being compromised as there had only been "nominal killing of Sikhs in his constituency" compared to other areas. He has alleged that Mr Tytler stated then that he had promised large-scale killing of Sikhs.
Mr Tytler says it is a "mischievous lie" that he was present when the mob killed the men. The CBI has argued that Jasbir Singh's testimony is unreliable.
The court said today that the CBI, "did not have the right not to record the statements of these witnesses and thus to have prevented the court from forming its own opinion regarding reliability of these witnesses."
In 29 years since the riots, only 30 people have been convicted, none of them high-profile politicians though several Congress leaders have been accused of inciting violence.
More than 10 commissions and committees have also investigated the 1984 riots. The last, the Nanavati Commission, had indicted Mr Tytler in 2005, saying it found "credible evidence" that he "very probably" had a hand in organising attacks on Sikhs.